Home Depot SWOT Analysis

An In-Depth SWOT Analysis of Home Depot
Home Depot swot analysis

1. Background of Home Depot

1.1. General Overview of Home Depot

Company Name

The Home Depot, Inc.


Craig Menear

Company Type


Year Founded


Number of Employees

41300 (2019)

Annual Revenue

US$110.2 billion (2019)


Bernard Marcus, Arthur Blank, Ron Brill, Pat Farrah, Kenneth Langone

Area Served

United States, Canada, Mexico


Atlanta Store Support Center, Atlanta, Georgia, US

1.2. Introduction to Home Depot

It is crucial to have an idea about the company to do a Home Depot SWOT analysis. Home Depot started its journey in 1978 and has emerged as one of the largest home improvement retailers. The company serves in America, Canada, and Mexico to earn a solid customer base.

1.3. Development Timeline of Home Depot


Home Depot started its journey.


Home Depot went public.


Home Depot surpasses Lowe’s In the US to become the largest home improvement store.


Home Depot purchased Maintenance Warehouse, a San Diego-based company.


Home Depot enters the Mexican market.


The company launched its online home-improvement store.


Home Depot established new distribution centers in Atlanta and Los Angeles.


The company acquired Hanover Direct.

2. SWOT Analysis of Home Depot

The Home Depot SWOT analysis can show the company's strengths that have helped them earn a name. The company can also get a view of its weaknesses. The readers can know their threats and opportunities to know more about its future SWOT analysis strategies.

2.1. SWOT Analysis of Home Depot in Detail


Analyzing the strength of any company is a very significant part of their SWOT analysis. The company must be well aware of its strengths as those features have helped them earn its name in the market. The company must keep in mind that they must not neglect their strengths when working on their weaknesses and new opportunities. Like most other brands, The Home Depot also has some strengths that have helped grow within 43 years:

  • The biggest strength of Home Depot is its policy to offer the best price. They offer the best value for their items, and if a customer tallies their price with that of others, they can find that it is comparatively lesser;
  • The company provides a wide variety of products regarding the home improvement sector. They have furniture, construction materials, and other home-building items. They are also branding environment-conscious products like power-efficient tools;
  • The company has shown a tremendous improvement in e-commerce. Though they had a slower e-commerce growth rate till 2019, from mid-2019, they started working on their e-commerce and secured growth;
  • The company has excellent HR policies which lead their employees to serve the company with enthusiasm. The company also pays the school fees of their employees. It has developed a dedicated employee team that provides excellent customer service.

For any company, it is pretty common to have some weaknesses. The companies need to find strategies that can remove those weaknesses. When a company is in a competitive market, any weakness can impact its growth against its competitors. The company can plan some long-term plans to change those weaknesses into their strengths. Home Depot also has some weaknesses. For example:

  • The company has an age-old infrastructure which may work as an obstacle on most occasions. Even though they invest in some advanced issues, their lack of infrastructural development causes them to fail;
  • The company is highly dependent on the North American market. Though they serve in America, Canada, and Mexico, the Mexican market is still unstable. When a company is highly dependent on a particular market, its condition impacts the market condition;
  • Though the company has shown tremendous growth after adopting its e-commerce, they were late to do so, which has impacted their business's growth to some extent;
  • Though the company has a reputation for its employee management and HR policies, they earned some negative publicity after firing an employee seeking a disability-related emergency break.

A company must consider the opportunities that they can get to survive the high market competition. They must set their policies as per those opportunities to ensure their growth in the future. They should also consider the condition of the market while working on their opportunities. Here are some opportunities for Home depot:

  • The company is yet to explore the market outside North America. If they can make appropriate policies to expand outside their limited geographic area, they can increase their sales;
  • The company should also concentrate on its online business. It can help them increase their business, and at the same time, if the company can adequately strategize their online activities, they can easily convert it to their strength;
  • Home Depot can also choose to go for some partnerships and acquisitions to ensure their expansion;
  • The company can also diversify their business; they can also work on their retail store or apparel line. The rough market conditions do not cause issues with their survival in the highly competitive market.

All the companies that survive in a competitive market must have some threats that can stop their growth. Other competent opponents' market conditions change of taste of the customers can be prevalent threats. Similarly, a famous brand like Home Depot also has some threats:

  • The home construction and decor industry are going through a hard time because of the looming recession. The economic conditions and post-pandemic contraction have added to it. As a result, companies like Home Depot are also facing some challenges;
  • The home construction market is an ever-growing one, and hence new companies are coming in almost every day. Their developed infrastructure, strategies can be a threat to Home Depot;
  • The company's limited access to the market can be a potential threat or them. They solely depend on the North American market for their revenue, and when there is a price deflation, the company may have a hard time meeting their expected earnings;
  • The company also has a diverse payment system. Therefore, they may have to suffer from the repeated employee strike. For example, the Mexican employee base of Home Depot wants a 20% pay hike, which is the same as its Northern employees.

Home Depot SWOT analysis

Source:EdrawMax Online

3. Key Takeaways

The Home Depot SWOT analysis can show that the company can handle its weakness and cushion its threats with some easy strategies. They need to plan some policies that can help them work on their opportunities to expand. Some recommendations for the company are:

  1. The company needs to concentrate on expanding its business beyond the geographic border of North America and some selected locations of Canada and Mexico;
  2. As the company has been serving for more than 43 years, its infrastructure is an old school that may fail to incorporate a modern household's taste. Therefore, they need to invest a good amount in improving their infrastructure;
  3. Home Depot can also bring in variety in their products so that they can attract more customers.

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